US Treasury Secretary Scott Bessent announced that he had a 'very successful engagement' with China on trade and artificial intelligence, as reported by Reuters. This statement comes ahead of the upcoming summit between US President Donald Trump and Chinese President Xi Jinping. Bessent further revealed that both countries agreed to hold another meeting focused on AI dialogue, and Washington proposed the establishment of a notification system between the US and China to facilitate communication on these issues [1].
US Trade Representative Jamieson Greer commented that US and Chinese teams are actively working on a board of trade agreement. According to the source, the Chinese side's board of trade is likely to include consumer goods and low-tech items, while the US side may focus on energy, agricultural goods, and potentially medical devices [1].
In terms of market reaction, the AUD/USD currency pair was trading 0.03% higher at 0.7127 at the time of reporting, indicating a modest positive response to the news [1].
The article also provides context on the ongoing US-China trade war, noting that President Donald Trump's return to the White House has reignited tensions. Trump has pledged to impose 60% tariffs on China, a policy he enacted upon taking office on January 20, 2025. These renewed tit-for-tat trade policies are expected to disrupt global supply chains, reduce investment spending, and contribute to Consumer Price Index inflation [1].
CONCLUSION
US Treasury Secretary Bessent's positive remarks on trade and AI engagement with China signal ongoing diplomatic efforts despite renewed trade tensions under President Trump. The modest uptick in AUD/USD suggests cautious optimism in the market. However, the resumption of aggressive tariff policies is likely to have significant implications for global trade and inflation.